Securities Laws

Corporate shares, limited partnership interests in a company, and passive LLC member interests are treated as securities by the federal and state governments. There are, however, exemptions for small businesses to allow a small number of investors to have interests without stepping on the law’s toes and without having to abide by the law’s complex framework and disclosure requirements (like the requirement to distribute an approved prospectus to potential investors, and register securities). Even if you qualify for exemptions to the disclosure rules, however, you dont want investors accusing you of providing misleading assurances. As such, our attorneys suggest disclosure of all of the relevant information to investors so they can make an intelligent, informed choice. Securities laws can be complicated and violations have serious consequences. Our South Carolina business attorneys recommend our clients and their South Carolina limited liability companies and corporations to err on the side of caution when it comes to securities and disclosures.

Overview Securities Laws

South Carolina start-up businesses looking at raising capital by issuing securities need to comply with federal and South Carolina securities laws. Federal and South Carolina securities laws require compliance with a complicated and technical regulatory framework. To create more confusion, federal and South Carolina securities laws are not always consistent with one another, and compliance with the federal securities laws does not assure compliance with South Carolina or other state securities laws. Moreover, certain transactions may require a business to comply with several states’ securities law, all of which may be different from one another.

Securities laws are complex and violations have serious consequences. Our South Carolina business attorneys recommend our clients and their LLCs and corporations to err on the side of caution when it comes to securities and disclosures.

In South Carolina, the Uniform Securities Act addresses securities laws and investments. The Uniform Securities Act covers exempt securities and transactions, securities registration, notice filings for federal-covered securities, fraudulent and other illegal acts, judicial review, enforcement, remedies, liabilities and penalties. Failure to abide with the Act or the disclosure requirements found in the federal Securities Act of 1933, and regulations found in Securities Exchange Act of 1934, will result in criminal, civil, administrative and private civil causes of action. It is also important to be aware that there is no federal or state securities law exemption for friends and family.

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